ALEP calls on Minister to review the ‘two year rule’ to simplify enfranchisement process

The Association of Leasehold Enfranchisement Practitioners (ALEP) has written to Esther McVey, Minister of State for Housing to review and improve flat owners’ rights to extend their leases.

ALEP calls on Minister to review the ‘two year rule’ to simplify enfranchisement process

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The Association’s letter to the Minister highlights the issue of the current two year wait regulation that applies to leaseholders wanting to purchase the freehold of their property.

John Midgley, ALEP Director, explains: “At present, under current legislation, leasehold property owners must have been the registered owner of their property for at least two years before being eligible to extend the lease of that flat. This is inconsistent with a flat owner’s immediate right to join in with other flat owners to acquire the freehold of their building under the collective enfranchisement provisions of leasehold reform legislation. The time limit for lease extensions may be avoided by some purchasers of flats if the sellers had already qualified for a lease extension and had formally brought a lease extension claim.”

The law allows eligible flat owners to extend their lease by an extra 90 years on top of the remaining lease term with the ground rents becoming a peppercorn (in other words, the rent is eradicated to zero).

John continues: “A lease of a flat is a depreciating asset. If a new owner must wait for at least two years to be able to exercise his or her rights, it could cost them a significant sum to extend their lease. ALEP campaigns for fairness and transparency and has been advocating this simple, logical change for years.”

John concluded: “Of course ALEP appreciates that there are a range of significant reforms to the law and practice surrounding the leasehold sector (including lease extensions) presently under review, which may take a considerable amount of time to bring forward and then implement. However, the Association considers modifying the two year rule a modest change that could hugely benefit the many leasehold flat owners in England, which is why this matter was brought to the Minister’s attention.”

The letter asks the Minister to look at amending the two year rule as part of a future Housing Bill that could be contemplated at the next Queen’s Speech.

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